Company code: Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) company abbreviation: Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357)
Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357)
Internal control evaluation report in 2021
Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) all shareholders:
According to the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control standard system), combined with the company’s (hereinafter referred to as the company’s) internal control system and evaluation methods, on the basis of daily and special supervision of internal control, We evaluated the effectiveness of the company’s internal control on December 31, 2021 (the benchmark date of the internal control evaluation report). I Important statement
It is the responsibility of the board of directors of the company to establish, improve and effectively implement internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report in accordance with the provisions of the enterprise’s internal control standard system. The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors. The management is responsible for organizing and leading the daily operation of the enterprise’s internal control. The board of directors, the board of supervisors and the directors, supervisors and senior managers of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this report, and bear individual and joint legal liabilities for the authenticity, accuracy and completeness of the contents of the report.
The objective of the company’s internal control is to reasonably ensure the legal compliance of operation and management, asset safety, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote the realization of development strategy. Due to the inherent limitations of internal control, it can only provide reasonable assurance for the realization of the above objectives. In addition, as changes in circumstances may lead to inappropriate internal control or reduced compliance with control policies and procedures, there is a certain risk to speculate the effectiveness of internal control in the future according to the internal control evaluation results. II Internal control evaluation conclusion 1 On the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting
□ yes √ no
2. Evaluation conclusion of internal control over financial reporting
√ valid □ invalid
According to the identification of major defects in the company’s internal control over financial reporting, there are no major defects in the internal control over financial reporting on the benchmark date of the internal control evaluation report. The board of Directors believes that the company has maintained effective internal control over financial reporting in all major aspects in accordance with the requirements of the enterprise’s internal control standard system and relevant regulations. 3. Whether major defects in internal control over non-financial reporting are found
□ yes √ no
According to the identification of major defects in the company’s internal control over non-financial reports, the company found no major defects in the company’s internal control over non-financial reports on the benchmark date of the internal control evaluation report. 4. Factors affecting the evaluation conclusion of internal control effectiveness from the base date of internal control evaluation report to the date of issuance of internal control evaluation report
There are no factors affecting the evaluation conclusion of the effectiveness of internal control from the base date of the internal control evaluation report to the date of issuance of the internal control evaluation report. 5. Whether the internal control audit opinion is consistent with the company’s evaluation conclusion on the effectiveness of internal control over financial reporting
√ yes □ No 6 Whether the disclosure of major defects in internal control of non-financial reports in the internal control audit report is consistent with the disclosure of the company’s internal control evaluation report √ yes □ no III Internal control evaluation (I) Scope of internal control evaluation
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. 1. The main units included in the evaluation scope include Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) , Luoyang Jianyang Technology Co., Ltd. and Jianlong (Thailand) Co., Ltd. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The ratio of the total assets of the units included in the evaluation scope to the total assets of the company’s consolidated financial statements 100
The total operating income of the units included in the evaluation scope accounts for 100% of the total operating income in the company’s consolidated financial statements The main operations and matters included in the scope of evaluation include:
Internal environment (including corporate governance, organizational structure, social responsibility and corporate culture), risk assessment, internal control activities (including asset management, sales business, engineering projects, financial reports, comprehensive budget management), internal supervision, etc.
The above units, businesses and matters included in the evaluation scope and high-risk areas cover the main aspects of the company’s operation and management, and there are no major omissions. The details are as follows:
1. Internal environment
(1) Corporate governance
In accordance with the company law, the securities law and other relevant laws and regulations and the articles of association, the company has established and revised the relevant corporate governance structure and rules of procedure of the general meeting of shareholders, the board of directors, the board of supervisors and other relevant institutions, as well as the setting, responsibilities and authorities of the general meeting of shareholders, the board of directors, the board of supervisors, senior management and all levels of institutions within the enterprise The working procedures and relevant requirements have made clear institutional arrangements, and established the balance of rights among the general meeting of shareholders, the board of directors, the board of supervisors and senior management.
The general meeting of shareholders is the highest authority of the company, which manages and supervises the company through the board of directors. The board of directors is the company’s permanent decision-making body, which is responsible to the general meeting of shareholders, deliberates and makes decisions on major decision-making issues in the company’s business activities, or submits them to the general meeting of shareholders for deliberation.
The board of directors of the company has a strategy committee, an audit committee, a nomination committee and a remuneration and assessment committee. The professional committees have formed a relationship of clear rights and responsibilities, mutual checks and balances, mutual coordination and complementarity. All professional committees have independent directors. Independent directors have played a positive role in improving corporate governance.
The board of supervisors is the supervisory body of the company, which is responsible to the general meeting of shareholders and supervises the behavior of the company’s directors, President and other senior managers.
(2) Organizational structure
It includes Luoyang Jianyang Technology Co., Ltd., Jianlong (Thailand) Co., Ltd., sales department, operation center, R & D center, audit department, enterprise management department, safety and environment department, logistics department, process technology department, quality management department, project department, finance department, office, legal department, labor union and other subsidiaries and departments. All departments of the company have clear responsibilities and are independent of each other, implement the principle of separation of incompatible positions, scientifically divide the responsibilities and authorities within each organizational unit, and form a mutual check and balance mechanism.
(3) Social responsibility
Guided by solving social problems and driven by technological innovation and product innovation, the company is committed to the sustainable development of the enterprise, improving the rights and interests of stakeholders (shareholders, customers, employees, suppliers, business partners, local society and other relevant organizations), actively fulfilling social responsibilities and promoting the harmonious development of the company itself and society.
(4) Corporate culture
The company’s vision is to “build an international first-class brand of molecular sieve and realize the sustainable and healthy development of Jianlong”, and its mission is to “prosper the enterprise through science and technology and serve the country through industry”; Adhering to the quality policy of “scientific and technological innovation, leading quality, customer satisfaction and continuous improvement” and the enterprise spirit of “unity, integrity, pragmatism and innovation”, improve the good brand image of the enterprise in an all-round way, and promote Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) brand to become a molecular sieve brand with global influence.
The company cares for employees, attaches importance to their rights and interests, cultivates employees’ sense of belonging by means of care, training, incentive and development, provides employees with a variety of career development paths through training, management and technology, stimulates work enthusiasm and helps employees grow, so as to promote the healthy and sustainable development of the company. 2. Risk assessment
The company has established an effective risk assessment process to identify and respond to major and generally influential changes that the company may encounter, including business risks, environmental risks and financial risks. Through extensive and continuous collection of initial risk information of all business units of the company, the company has established a list of business risks. Through training and publicity, transform the risk management awareness into the common understanding of all employees of the company, establish a correct risk management concept, enhance the risk management awareness of all employees, and promote the company to establish a systematic, standardized and efficient risk management mechanism.
4. Internal control activities
(1) Asset management
The company has revised relevant business processes such as fixed assets purchase entry and inventory process, fixed assets scrap disposal process, fixed assets allocation process and property insurance insurance process, clarified the responsibilities, authorities and post separation requirements of all links of fixed assets business, and standardized the operation processes related to fixed assets. Strengthen the insurance of fixed assets, and conduct routine spot checks on the purchase requisition, acceptance, inventory and other processes to ensure the safe, complete and effective use of fixed assets.
The company’s inventory and warehousing management procedures have been revised. Through regular and irregular inventory inspection and other inspection activities, we can timely find the weak links in management, continuously improve the level of inventory management, and ensure the integrity and accuracy of inventory information.
(2) Sales business
The company revised and improved relevant processes such as sales plan formulation process, sales credit rating process, product pricing process and sales contract conclusion process, established relevant processes such as sales plan formulation, customer credit management, sales pricing management and sales order management, reasonably set up sales related posts and clarify responsibilities and authorities.
(3) Project
The company revised and improved the business processes such as project initiation budget workflow, project bidding workflow, project change workflow and project acceptance workflow, standardized the work processes such as project budget, bidding, construction and acceptance, reasonably set the responsibilities and authorities of relevant departments and posts, and achieved feasibility study and decision-making, budget preparation and review Incompatible positions such as completion accounts are separated from each other. Strengthen the monitoring of the whole process of project construction to ensure the quality, progress and capital safety of the project.
(4) Financial Report
The company has formulated unified accounting policies in accordance with the company law, accounting law, accounting standards for business enterprises, securities law and other relevant laws and regulations, revised the process of preparation and external provision of financial statements in combination with the actual situation of the company, and defined the business processes such as preparation, submission and analysis of financial reports, The division of responsibilities and financial reporting of each link are standardized and complete in a timely manner.
(5) Comprehensive budget management
The company revised and improved the comprehensive budget management process, refined the responsibilities, division of labor and authority of each department and position in the budget management system according to the principle of separation of incompatible positions, and clarified the authorization and approval system and procedures for all links of budget preparation, implementation, analysis, adjustment and assessment.
The comprehensive budget management process plays an important role in strengthening budget management, standardizing budget management behavior, strengthening internal control and preventing business risks. At the same time, it helps to improve the management level and economic benefits of the company and achieve the annual business objectives of the company.
5. Internal oversight
The audit committee of the board of directors of the company sets up an audit department, equipped with special internal auditors to conduct regular and irregular systematic inspection on the implementation of internal control, evaluate the efficiency and effect of internal control design and implementation, and ensure that the procedures of internal control testing and evaluation are compliant, the methods are reasonable, the evaluation results are objective and the rectification suggestions are feasible, The internal control evaluation report shall be true and accurate.
Report the internal control defects found in the audit or inspection to the audit committee of the board of directors, urge relevant departments to take positive measures for rectification, and continuously follow up the rectification to achieve closed-loop management. 4. High risk areas of focus mainly include:
Corporate governance, organizational structure, social responsibility, human resources, information disclosure, capital business, procurement business, sales business, financial report, management and control of subsidiaries, external guarantee, contract management, etc. 5. The above units, businesses and matters included in the evaluation scope and high-risk areas cover the main aspects of the company’s operation and management. Is there any major omission
□ yes √ No 6 Is there a statutory exemption
□ yes √ No 7 Other explanatory matters
None (II) Basis of internal control evaluation and identification standard of internal control defects
According to the provisions of the enterprise internal control standard system and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control standard system), combined with the company’s (hereinafter referred to as the company’s) internal control system and evaluation methods, the company organizes and carries out internal control evaluation on the basis of daily and special supervision of internal control. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished internal control over financial reports from internal control over non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company, And consistent with previous years. 2. Identification standard of internal control defects in financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Potential misstatement amount of total profit ≥ 5% of total profit ≤ misstatement ＜ profit misstatement amount ＜ 10% of total profit and 10% 5% of total profit
Potential misstatement amount of total assets ≥ 1% of total assets ≤ 0.5% of total assets ≤ misstatement ＜ misstatement amount ＜ total assets
Report 1% 0.5% of total assets
Description: None
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defects, alone or together with other defects, make it impossible to prevent or detect and correct major misstatement in the financial report in time. The following situations are identified as major defects: ① fraud of directors, supervisors and senior managers of the company; ② The company substantially corrects the published financial report; ③ Certified Public Accountant
